Newfoundland National Convention, 5 January 1948, Debates on Confederation with Canada


January 5, 1948

Mr. Hollett I give notice that I will on tomorrow ask that the Commission of Government lay on the table copies of the following documents:
Letters Patent of 28 March, 1876
Letters Patent of 17 July, 1905 and
Letters Patent of 30 January, 1934.
Mr. Chairman, I have here a reply to a question which I tabled sometime ago. Would it be in order to read that?
Mr. Chairman If it is for the information of the House, Mr, Hollett, of course.
Mr. Hollett I will read the question first:
Whereas under Annex IV, page 16,[1] of the "Proposed Arrangements for the Entry of Newfoundland into Confederation" dated at Ottawa, Canada, October 30, 1947, under heading "Probable Expenditures", there is an item titled "Other Departmental Expenditures, $9,400,000" which it is understood is meant to take care of the cost of extending existent services to Newfoundland in a typical year should Newfoundland enter into confederation;
Now therefore will the said Department of External Affairs inform this National Convention at the earliest possible moment as to the following:
Are the "Existing Services" referred to, those outlined under heading "Public Services provided by Canada", sections 3 to 6 inclusive, excepting always of course, section 4, sub-sections (1) and (2) and section 5 sub-section (1)? If so, what are the allocations in respect of each several service? Or generally, it is desired that an understandable breakdown be made of the amount of $9,400,000.
And the answer is as follows:
(a) With one exception the "Existing Ser vices" referred to are those outlined in the question. The exception is an estimate of the cost of operation of the telegraph system, which is not included in this table. Since revenues derived from the system are expected roughly to balance expenditures, it was not thought necessary to include estimates for either. (See succeeding answer.)
(b) "Ordinary" Expenditures of the Dominion Government in Newfoundland.
The following items listed below, comprising the $9,400,000 estimated for "Other Departmental Expenditures" (as shown on p.16 of "Proposed Arrangements for the Entry of Newfoundland into Confederation"), were compiled chiefly from reports submitted by various departments of the Dominion overnment. They represent estimates of the additional cost of extending "ordinary" Canadian services, supplied by these departments, to Newfoundland in a "typical" year.
The figures must be regarded as tentative estimates only, and not as commitments by the Dominion government. Actual expenditures might prove to be higher or lower than the estimates, depending upon circumstances which cannot now be foreseen. Since these figures are estimates of additional expenditures in a "typical" year and do not take into account the abnormal conditions prevailing at the present time, it is anticipated that additional expenditures during the first few years of union might be considerably higher than the estimates shown.
It should be emphasised again that these estimates relate to the additional expenditure arising from inclusion of Newfoundland and therefore do not include any part of the existing departmental expenditures, even though such existing expenditures may be of benefit to Newfoundland.
Estimates prepared in the several departments for the information of members of the Canadian Cabinet Committee appointed to meet the Delegation from the Newfoundland National Convention. [See bottom of next page]*
That is the breakdown, and I would appreciate it if that reply could be handed to each member of the Convention.
Mr. Smallwood Mr. Chairman, I too have replies to some questions I directed to the Government of Canada, some at the request of members of the Convention, and some others of them at my own instigation.
First question: To ask His Excellency the Governor in Commission to ask the Government of Canada whether the recent published statement of Honourable Mr. Duplessis, 1028 NATIONAL CONVENTION January 1948 Premier of Quebec, on the Labrador boundary, modifies in any particular the letter and enclosure of October 29, 1947, of the Right Honourable the Prime Minister of Canada, particularly in clause 2 of the enclosure, which reads as follows: "The Province of Newfoundland will include the territory of Labrador defined by the award of the Judicial Committee of the Privy Council in 1927 as Newfoundland territory."
Answer: It is not clear from the question what statement of the Honourable Mr. Duplessis is referred to, but in any case the letter of October 29, 1947, from the Prime Minister of Canada to His Excellency the Governor of Newfoundland, with its enclosure, is not modified thereby in any particular either with regard to clause 2 of the enclosure or any other clauses.
Another question I submitted was this:
To ask His Excellency the Governor in Commission to ask the Government of Canada to state whether, in the event of union and the consequent operation of the Newfoundland railway and steamship system by Canada, it would be the policy of the Government of Canada to continue in their employment all the employees of the system at the time of union, with the rights and privileges with respect to continuity of employment that are accorded to employees of the Canadian National Railways.
And to that question the Government of Canada has sent the following reply:
As provided in clause 17(1) of the "Proposed Arrangements", if the Canadian National Railways were to assume responsibility for the operation of the Newfoundland Railway and its steamship services, employees of the Newfoundland January 1948 NATIONAL CONVENTION 1029 Railway system would be offered employment with the Canadian National Railways with the rights and privileges with respect to continuity of employment accorded to employees of the Canadian National Railways.
And then I sent this question:
Whether there exists a federal shipbuilding bounty, and, if so, to give an outline of the plan.
To which the Government of Canada sent the following answer:
At the moment no federal shipbuilding bounty exists in Canada. The recently—established Canadian Maritime Commission may be of interest to the National Convention in connection with shipbuilding. A copy of the Canadian Maritime Commission Act, 1947, is attached. Paragraphs 6 and 7 of the Act are relevant to the question of shipbuilding and related problems.
Another one:
I give notice that I will on tomorrow ask His Excellency the Governor in Commission to ask the Government of Canada if they would assist the National Convention in its consideration of the proposals for union by explaining in some detail the basis of computation of the table in Annex IV showing "Probable Federal Revenue" from Newfoundland in the event of union.
To that the Government of Canada has sent the following reply:
Probable Federal Revenues Personal Income Tax — $3,200,000.
In the absence of detailed statistics relating to the distribution by income classes of Newfoundland taxpayers it was necessary to make a number of assumptions which appeared to be reasonable as to the relationship between income distribution in Canada and income distrubtion in Newfoundland. The estimates of the probable number of taxpayers in each income group was then multiplied by the average tax paid by Canadians in the same income goup in order to arrive at the total figure of $3,200,000.
It was explained that these figures are tentative and subject to adjustment. If the detailed statistics of distribution by income classes can be provided for a recent year, estimates of revenue could be made with greater certainty.
Corporate Income Tax — $7,500,000.
The Canadian rate of corporate income tax, applying in 1948 in provinces which enter into tax agreements with the Dominion government, was applied to the latest estimate of taxable income of companies now paying taxes to the Newfoundland government. Estimates of taxes on dividends and interests, rents, banks, and insurance companies, were based on the latest figures of Newfoundland collections, corrected to take account of any differences between Newfoundland and Canadian rates.
Succession Duties —— $320,000.
The total amount of death duties paid in Newfoundland for the years 1940-46 in each category and the rates of tax for each category, were used to determine the total value of estates taxable during the six-year period. This figure was divided by the number of years in order to arrive at the average value of estates becoming taxable each year. The Canadian composite rate of taxation, as applicable in 1948, was applied to this average value and the figure of $320,000 was the result.
Customs Duties and Import Taxes — $2,000,000.
The estimate of $2,000,000 additional customs revenue which would accrue to the federal government as a result of union is based primarily on an analysis of Newfoundland trade in the years 1943 to 1945.
Goods now imported from Canada would, of course, be duty free. In addition, there is every reason to believe that Canadian goods will be available at a price level which will induce a substantial shift in imports from outside countries to Canada, particularly in those lines where Canadian goods are now closely competitive with foreign goods in the Newfoundland market. Finally, it was necessary to apply Canadian rates (which are substantially lower) rather than Newfoundland rates to the remaining foreign trade. On the basis of the 1943-1944 Newfoundland figures (the latest complete data available at the time the estimates were prepared), estimates of potential Canadian customs 1030 NATIONAL CONVENTION January 1948 revenue varied from $2,400,000 with no diversion to Canada, to $1,000,000 with the maximum diversion to Canada that could be anticipated. Weighing all possibilities, it was concluded that a figure of $2,000,000, though probably on the high side for the year 1943-44, was a fair estimate, having in mind the increase in trade since 1943—44,
Since the time the estimates were prepared, trade has been sustained at a higher level than had been anticipated, and probably if the data were to be reworked a figure somewhat higher than $2,000,000 would emerge (though this might be offset to some extent by reduction in duty pursuant to Geneva Agreement), but such adjustments, either upwards or downwards, are inevitable and would apply to all the estimates of both probable expenditures and probable revenues.
Liquor and Tobacco Taxes -— $400,000 and $500,000.
These estimates were based on consumption of liquor and tobacco in Newfoundland, as indicated by customs returns. Estimates of present consumption were altered to take into account trends of consumption indicated by figures over the past few years, and a probably decline in consumption as a result of a return to more normal levels of income and higher prices due to higher Canadian excise duties after confederation.
General Sales Tax and Miscellaneous Excise Taxes - $4,000,000 and $1,500,000.
The above figures are based on revenue in Canada, reduced in proportion to population and corrected generally to account for a probable lower per capita national income than in the existing provices and probable lower volume of sales.
Post Office — $750,000.
This figure was supplied by the Post Office Department of the Dominion government and was compiled on the basis of available information about the volume of mail in Newfoundland,
No estimate of revenue from the telegraph system is included in this figure, nor is any estimate of expenditures on the telegraph system made in the additional cost of extending "ordinary" Canadian services to New foundland. Since on the average these two items balance out, it was not felt necessary to include them in either estimate.
Question: For a statement of the changes that will occur in the tariff and excise figures as a result of the Geneva agreements and to apply these changes particularly to the items listed on pp. 126 to 138 of the Report of the Ottawa Delegation.
Answer: (Explanation of Excise Tax changes follows list of changes in Customs Tariff)
Canadian tariff concessions which are to be made pursuant to the General Agreement on Tariffs and Trade concluded at Geneva on October 30, 1947, are set forth in Schedule V of the AGreement. A copy of this Schedule is attached. Also attached for the information of the Convention are copies of the following:
The Customs Tariff and Amendments; Orderin Council, P.C.5270, which brings the Geneva agreements into force;
Foreign Trade for November 22, 1947, in which is reprinted a press release on the Geneva Agreement,
It should also be noted that imports in general will be temporarily affected by the emergency measures announced for the conservation of United States dollars. The principal measures are set forth in the following, copies of which are attach:
Bill 3 entitled, "An Act respecting Emergency Measures for the Conservation of Canadian Foreign Exchange Resources";
Votes and Proceedings of the House of Commons, December 18, 1947, (pp. i and ii).
Also attached is a copy of a speech broadcast by the Minister of Finance on November 17 outlining the measures to be adopted to deal with Canada's United States dollar problem.
Presumably information regarding changes in the Newfoundland tariff under the Geneva Agreement may be obtained from the Commission of Government.
[There follows a detailed list of changes to be made to the Canadian tariff as a result of the GATT agreement, 1947]
It should be noted that the changes which have been outlined in the excise taxes of Canada (see Votes and Proceedings of House of Commons of December 18, referred to January 1948 NATIONAL CONVENTION 1031 above) are part of the government's plan to conserve United States dollars and are not the result of the Geneva agreements. The former is an emergency measure, designed to overcome temporary difficulties arising from the tardiness in recovery of world multilaterial trading. The latter is a long-run agreement designed to facilitate multilaterial trade.
[There follows a list of excise tax changes]
In addition taxes at the rate of 25% ad valorem have been announced as part of the emergency plan on the following items which were previously free of tax (see Votes and Proceedings, December 18, 1947 referred to above)....
[Documents dealing with Canadian trade policy were appended to this answer]
Now these are the replies to some of the questions I have submitted to the Government of Canada, replies that have just this minute been received. I don't know, sir, whether you have any information as to when I am likely to receive replies to those other questions, but those are the replies I have received so far, and I presume that the secretariat will have them mimeographed or otherwise made available to the members and for the information of the press and radio, and generally of the public of Newfoundland.
Mr. Chairman On that point, before you go any further I think I would want to consult the Steering Committee on this matter. Some of the answers take the form of incorporating by way of reference certain voluminous documents which are appended thereto, and it might be that it would occasion considerable hardship and considerable loss of time if the principle of mimeographing all replies indiscriminately were employed... Therefore, before I am prepared to make any ruling on the point, I think I must refer the matter to the Steering and Information Committees, so that they may be able to assist me in determining what is the most satisfactory modus operandi to be employed in fairness to members in the present circumstances.
Mr. Cashin Mr. Chairman, I am going to take the privilege of announcing some of these ones I have received here... I am going to give you the whole thing now. I am very sorry indeed, because it is going to take a lot of time.
Mr. Chairman If you choose to summarise that's all right.
Mr. Cashin Question:
I give notice that I will on tomorrow ask the Honourable the Commissioner for Justice, that if in the event of Newfoundland becoming a Canadian province it will void and annul section 45 of the Labrador Mining and Exploration Act of l938 which states "except where it is necessary for the Company to employ technical experts, the Company shall at all times employ Newfoundland workmen, provided same shall be available"?
I also ask the Commissioner for Justice what effect, if any, the entry of Newfoundland into union with Canada will have upon article II of the agreement made between Canada and Newfoundland on air transport and dated the 29 July, 1946, which article provides that wherever possible priority shall be given to citizens of Newfoundland in the employment of labour at the airfield at Goose Bay?
Answer: January 8, 1948.
Dear Sir,
I have to refer to your letter of December 4 addressed to the Secretary for Justice with which were forwarded copies of notice of two questions by a member of the National Convention.
The questions are hypothetical and it is not usual to give legal opinions upon such questions. I am, however, to convey to you the opinion that, subject to any provision in the formal document which would embody the exact terms upon which Newfoundland would become a province of the Dominion of Canada, clause 45 of the agreement forming the schedule to the Labrador Mining and Exploration Company Ltd. Act of 1938, which sets forth one of terms or conditions on which a company has acquired property rights in Newfoundland, would continue operative and that, subject as aforesaid, the Air Transport Agreement made between the Government of Canada and the Government of Newfoundland on July 29, 1946, would cease to operate as air transport to and from Newfoundland is a matter which would lie entirely within the field of Dominion jurisdiction.
Yours faithfully, W.J. Carew Secretary.
The Secretary of The National Convention.
Question: I give notice that I will on tomorrow ask His Excellency the Governor in Commission to ascertain from the United Kingdom government the latest date on which the recommendations of this Convention must be submitted to the Secretary of State for Commonwealth Relations in order to ensure the holding of a referendum in the spring of 1948.
In the event of the majority of the voters in the forthcoming referendum favouring a form of government other than Commission of Government, at what time and by what method will the change to the new form of government become effective?
Answer: January 8, 1948.
Dear Sir:
I have to refer to the question asked by a member of the National Convention as to the latest date on which the recommendations of the Convention must be submitted to the Right Honourable the Secretary of State for Commonwealth Relations in order to ensure the holding of a referendum in the spring of 1948.
The Right Honourable the Secretary of State has already informed the Commission of Government that a period of at least one month will be required for the consideration of the recommendations of the Convention.
The Commission of Government have given consideration to the question of setting a date for the holding of the national referendum and I have been directed to communicate their views to the National Convention.
It is hoped that it will be possible to hold the referendum about the end of the month of May this year. It is impracticable to hold a poll during the period from early June to late September as so many people are away from their homes and may be disfranchised. Final arrangements cannot be made for holding the referendum until the necessary legislation has been passed and steps in this direction cannot be taken until a decision has been made as to the questions to be submitted to the people.
Members of the Convention familiar with the difficulties of travel during the spring months in sections of Newfoundland and in Labrador will realise that ample time must be allowed for the distribution of ballot papers and other materials for all polling booths. The matters preliminary to the voting will take place in the following order — delivery of recommendations by the National Convention, consideration by His Majesty's Government in the United Kingdom, communication of decision as to forms of government to be submitted to the people, final draft and publication of legislation for comment, passing of legislation, printing of ballots and other forms, setting up of polling stations and distribution of election material.
In order to permit sufficient time to complete the necessary arrangements and to ensure to all qualified electors of Newfoundland and Labrador the opportunity of voting, it will be necessary, if the referendum is to be held during the month of May, to have the recommendations of the Convention submitted at an early date. The Commission are unable to give any assurance that the referendum will be possible this spring if the recommendations of the Convention are not received by the end of the present month.
Yours faithfully, W.J. Carew Secretary.
The Secretary of The National Convention.
January 8, 1948.
Dear Sir:
Consideration has been given to the question asked by a member of the National Convention concerning the time and method by which a form of government other than Commission of Government, if selected by a majority of the voters at the referendum, would become effective.
I am directed to say that the question relates to matters not included in the duty and function of the National Convention as set forth in the legislation constituting that body. I am to assure the Convention, however, that, if the people voting at the referendum select a form of government different from the present form, the necessary arrangements will be made to give effect at the earliest possible date to the decision of the people.
Yours faithfully, W.J. Carew Secretary
The Secretary of The National Convention.
January 3, 1948.
Dear Sir,
I refer to your letter of December 5 to the Secretary for Finance, enclosing seven questions relating to revenue asked by Major Cashin in public session of the Convention and approved by the Information Committee. I attach, as Enclosure I, the answersto questions 1-6 insofar as they relate to revenue collected by this government in 1946-7.
Those parts of questions 1-6 which relate to revenue collections in the event of Newfoundland becoming a province of Canada, and the whole of question 7, have been referred to the Canadian government. I attach, as Enclosure II, a copy of the replies furnished by that government.
Yours faithfully, W.J. Carew Secretary.
Capt. W. Gordon Warren, R.A., Secretary, The National Convention.
Enclosure I
Replies to Major Cashin's Questions of 4 December, 1947, relating to Revenues collected by the Government of Newfoundland in 1946-47.
1. The total taxes collected by the Assessor's Department for the year 1946-47 were as follows:
Personal income tax $ 2,798,019
Corporation income tax 7,157,340
Withholding tax on dividends and interest paid to non-residents 596,030
Death duty 193,880
Other revenue 47,645
Total net revenue $10,792,914
2. The total customs duties on goods imported from all countries during 1946-47 was $18,713,607. Information is not available as to the amounts collected on imports from particular countries. A very rough approximation may be secured by applying the average rate of duty to the quantity of goods imported from particular countries, and on this basis the figures required would be, approximately:
Duty on imports from Canada $10,800,000
"     "         "            "      USA 6,500,000
" "       "            "       UK 1,000,000
" " " " Other countries 400,000
3. Import duties on liquors imported during 1946-47 were as follows:
From the United Kingdom $ 147,054
" Canada 292,408
" USA 101,754
" Other countries 793,194
4. The import duties collected on tobaccos, cigarettes, and cigars in the year 1946-47 were:
From USA $ 2,343,568
" United Kingdom 16,563
" Canada 105,986
" Other countries 15,348
5. The excise taxes collected during the year 1946-47 were as follows:
On beers $ 231,831
" tobaccos 426,135
" cigarettes 766,100
" butterine (duty removed with effect 304,165
from 9.11.46. The total therefore represents collections for the period 1 April to 8 November, 1946)
6. The total revenue collected by the Department of Posts and Telegraphs in 1946-47 was $1,594,820.10.
Enclosure II December 30, 1947.
Answers by the Canadian Government to parts of certain questions forwarded by His Excellency the Governor of Newfoundland on behalf of the National Convention of Newfoundland by letter under date of December 9, 1947
Question 1:
What was the total amount of taxes collected from the people of Newfoundland for the fiscal year 1946-47 under the following headings:
(a) Personal Income Tax (b) Corporate Income Tax and (c) Death Duties.
In the event of Newfoundland becoming a Province of Canada, what would be the comparative taxes collected by the federal 1034 NATIONAL CONVENTION January 1948 government under present Canadian taxation rates under:
(a) Personal income tax (b) corporate income tax and (c) succession duties? Answer (to second part):
In Annex IV of "Proposed Arrangements for the Entry of Newfoundland into Confederation", are set out the estimates of additional federal revenues from personal income tax, corporate income tax, and succession duties, that would probably arise as a result of the inclusion of Newfoundland within Canada in a full year at the rates of tax exacted in the 1947 federal budget on the assumption of a continuation of present levels of economic activity in Newfoundland.
The amounts are as follows:
Personal income tax $ 3,200,000
Corporate income tax (including withholding tax) 7,500,000
Succession duties 320,000
Questions 2, 3 and 4:
Give a statement showing the customs duties collected on goods imported from the USA, Great Britain, Canada and other countries for the year 1946-47. In the event of union with Canada, what would be the duties collected on the same quantities of goods and value imported from the USA, Great Britain and other countries under the Canadian tariff as it at present exists, for the year mentioned above?
Give a statement showing the amount of taxes collected on liquors imported from Great Britain, Canada and the USA, as well as other countries, for the year 1946-47. In the event of union with Canada, what would be the duties collected by the federal government of Canada under the Canadian rate of duty as now existing?
Give a statement showing the total amount of taxes collected on tobaccos, cigarettes and cigars imported from the United States, Great Britain and Canada and other countries for the fiscal year 1946-47. In the event of union with Canada, what would be the duties collected by the federal government of Canada for similar quantities under the Canadian rate of duties as now existing? Answer (to second part of each question):
One of the basic assumptions underlying the Canadian estimate of additional federal revenue to be derived from customs duties as a result of the inclusion of Newfoundland Within Canada, is that goods imported into Newfoundland from Canada would be free of duty under confederation and that a diversion of Newfoundland trade would take place from other countries to Canada as a result of the disappearance of the tariff barriers between Canada and Newfoundland. This being the case it would be impossible to compare figures showing customs duties collected in Newfoundland during the fiscal year 1946—47, and estimates of duties collected after confederation. Both quantities and values of goods imported are expected to change.
An estimate of die addition to federal revenue from customs duties and import taxes as a result of the entry of Newfoundland into confederation are set out in Annex IV of "Proposed Arrangements for the Entry of Newfoundland into Confederation." The estimate is as follows: Customs duties and import taxesz$ 2,000,000 Questions 5 and 7:
What were the total excise taxes collected by the Department of Customs under the different headings for the fiscal year 1946-47 and, in the event of union with Canada, what would be the total amount of similar taxes collected under the present Canadian excise rates?
In the event of union with Canada and in the event of Canada supplying from its own manufacturing plants all our liquor requirements, what would be the total excise tax collected by the federal government of Canada annually?
Answer (to second part of each question):
It would be misleading to compare estimates of increases in collections of Canadian excise taxes as a result of the inclusion of Newfoundland within Canada with collections of excise taxes in Newfoundland by the Newfoundland government, since, in addition to excise taxes, the federal government levies excise duties on liquor and tobacco. Estimates of additions to federal revenue from excise taxes and excise January 1948 NATIONAL CONVENTION 1035 duties as a result of the entry of Newfoundland into confederation are set out in Annex IV of "Proposed Arrangements for the Entry of Newfoundland into Confederation". They are as follows:
Liquor taxes $ 400,000
Tobacco taxes 500,000
General sales tax 4,000,000
Miscellaneous excise taxes & sources of revenue 1,500,000
Question 6:
What was the total amount of revenue collected by the Department of Posts and Telegraphs for the fiscal year 1946-47 and, in the event of union with Canada, what would be the amount of revenue collected by the Canadian federal government under their present system of posts and telegraph charges?
Answer (to second part):
The estimate of the addition to federal postal revenue arising out of the inclusion of Newfoundland within Canada is $750,000. (See Annex IV., "Proposed Arrangements for the Entry of Newfoundland into Confederation").
No estimate of either revenues or expenditures in connection with the telegraph service are included in the tables setting out estimated additions to revenues and expenditures of the federal government. Since they appear to have roughly balanced over the past years it was not considered necessary to include them.
What rates of taxation would be imposed upon amounts received by beneficiaries under life insurance policies in the event of union between Canada and Newfoundland?
The present law in Canada relating to income tax and succession duties provides as follows:
1. When proceeds of a life insurance policy are received by the insured in a lump sum, whether through taking the cash surrender value, or by reason of maturity of an endowment type of policy, the proceeds are not subject to income tax.
2. When proceeds of a life insurance policy are taken by the insured in the form of an annuity, pension, or settlement option, the periodic payments shall be liable for income tax in the same way as payments under any other annuity contract, that is, only diat portion of the payments which represents interest is subject to tax, the portion which represents return of capital not being taxable. (See Sec. 3(1) (g) Income War Tax Act, copies of which have been supplied to the National Convention...)
3. When proceeds of a life insurance policy go to a beneficiary upon death of the insured the proceeds of the policy are included in the total estate of the deceased and are subject to succession duties as part of the estate.
If the proceeds of the life insurance policy are payable in the form of an annuity to the beneficiary the present value of the annuity at time of death is included in the estate of the deceased for succession duty purposes. The annuity payments will be subject to income tax in the hands of the beneficiary in the same way as payment under any other annuity contract.
Question: What is the population of Canada as at the taking of the last census?
Answer: The population of Canada as of the taking of the census of 1941 was 11,506,655. The population of Canada in 1947, as estimated by the Dominion Bureau of Statistics on the basis of figures relating to natural increase, immigration, emigration, etc., was 12,582,000.
Question: Has the Dominion of Canada recently applied to the United States for a temporary loan? What was the amount applied for, the amount received and under what terms was the said loan given?
Answer: On November 17, 1947, the Minister of Finance announced that arrangements had been made with the Export-Import Bank of the United States for a credit of $300 million (US dollars). Negotiations concerning this credit are still in process.
Question: The annual revenues and expenses of the Canadian National Railways and its subsidiaries from the year 1931-32 to the year 1946-47, both years inclusive, showing the surplus or deficit each year as the case may be.
The total advances made each year from 1036 NATIONAL CONVENTION January 1948 the year 1931-32 to 1946-47 by the Canadian treasury to the Canadian National Railways on account of deficits incurred or in the way of loans.
What is the total debt of the Canadian National Railways including the Canadian National Steamships also the Trans-Canada Airlines and any other tranSportation facilities?
Answer:Attached is a table setting out the revenues and expenses of the Canadian National Railways for the years 1937-1946 inclusive. Since the Canadian National Railways was reorganised at the beginning of this period the statements of revenues and expenditures before 1937 are not at all comparable with those for the period shown. Therefore only the latter figures have been set out.
Also attached are statements showing the change in the character of liabilities of the Canadian National Railways. It will be noted that loans by the Dominion government to the Canadian National Railways have increased during the period while the amount of funded debt held by the public has decreased during the same period. The explanation for this is that during the recent war the Dominion government loaned funds to the Canadian National Railways to repatriate liabilities held by the public in the United Kingdom.
The balance sheet in the annual report of the Canadian National Railways indicates the assets and liabilities of the railway system. Also attached is a statement setting out the deficits of the Canadian National Railways paid by the Dominion government during the period 1937-46. From this is deducted the surpluses paid to the Dominion government by the railway and a statement of net payments by the Dominion government is shown.
Also attached is a statement setting out similar figures for Trans-Canada Airlines during the period 1938-46.
The annual report of Canadian National Steamships Ltd., contains the consolidated balance sheet of that company. A copy of the latest available annual report is attached.[1]
Question: What is the per capita tax of the federal government of Canada?
Answer: A very substantial portion of the Canadian govemment's revenues is derived from a graduated tax on personal incomes. Those below the exempt level pay no income tax and the weight of the tax rises proportionately to income. Succession duties are likewise related to the size of estates. Another substantial source of revenue is the corporation tax which ultimately affects the incomes of individual shareholders, most of whom are in the upper income brackets. Substantially less than half of federal revenues will this year be derived from what might be termed consumption taxes, such as customs, excise, sales tax, tobacco and liquor taxes, etc., and, even in respect of those, the incidence of the taxes varies greatly as between individuals because of differences in income and other circumstances. Moreover, figures of tax revenues in Canada include collections in respect of previous years and do not therefore reflect the current burden of the rates.
Any attempt to calculate the per capita tax in Canada by dividing the total tax revenue in any year by the population is therefore most misleading, particularly if the figure so derived is compared with a similar figure for any other country; indeed, such a comparison might produce manifestly absurd results. Apart altogether from the reasons . given above it should be bome in mind that even though tax rates in country A are lower than in country B, if country A had a higher national income per capita it might well have a higher average tax per head of population than country B. The only relevant figures would be those showing taxes paid by individuals in different countries with the same income in respect of the same year, but this, of course, is a most difficult statistical computation.
Question: The annual revenues and expenditures of the Dominion of Canada each year from the year 1931-32 to the year 1946-47, both years inclusive, showing the surplus or deficit each year as the case may be.
Answer: In the attached table is set out a statement of revenues and expenditures of January 1948 NATIONAL CONVENTION 1037 the Dominion government for the fiscal years 1923-24 to 1946-47, inclusive, and a statement of revenues and expenditures for that part of the fiscal year 1947—48 ending on November 30, 1947. Expenditures are broken down to show ordinary expenditures, capital expenditures, special expenditures (such as relief expenditures, deficits of the Canadian Wheat Board, etc.,) and War, demobilisation, and reconversion expenditures. It will be noted that special expenditures during the depression of the 1930's and war, demobilisation, and reconversion expenditures during the period 1940-46 contributed largely to the deficits of the Dominion Government.[1]
Question: What is the total national debt of the federal government of Canada? Give a statement of the national debt, showing each specific loan, its date of maturity and where the debt is held.
Give a statement of the various sinking funds set aside for the redemption of the national debt of Canada.
Answer: The most recent complete statement of the public debt of the Dominion of Canada is that given in the budget speech delivered by the Minister of Finance, the Honourable D.C. Abbott, on April 29, 1947. This statement is contained in the appendix to the budget, pages 56 to 64 of the "Budget Speech". This statement gives details of individual loans including dates of maturity as at the date of the speech. Copies of this publication have been made available to the National Convention but an additional copy is attached to which reference may be made.
The most recent estimate of the public debt is that of October 31, 1947, which shows the gross debt as being $17,223,229,733 (compared with $17,698,195,740 of March 31, 1947) against which should be set active assets of $4,759,131,576 leaving a net debt of$12,464,098,157.
For purposes of comparison the following table sets forth the position of the United Kingdom, the United States, and Canada with regard to gross debt; net debt, population, and net debt per capita:**
Due to the fact that a large proportion of the Canadian national debt is held in the form of bearer bonds, it is impossible to answer the question relating to where the debt is held.
The Canadian government meets its debts as they fall due, but, like the US government, does not follow the practice of holding sinking funds against specific loans. Question: What amounts of money were paid by the Canadian government for each of the railway systems as follows: the Grand Trunk, the Grand Trunk Pacific and the Canadian Northern all three of which are now included in the Canadian National Railways system? What was the total amount in dispute and defaulted on by the Canadian government in respect of the Grand Tmnk bonds held by English financial institutions?
Did the Canadian Treasury guarantee any loan to the Canadian Pacific Railway prior to 1940 and if so, what was the amount?
Answer: It has been found that the preparation of adequate answers to these questions would involve a considerable amount of research. As it does not appear that the information sought in the questions bears any significant relation to the question of possible 1038 NATIONAL CONVENTION January 1948 federal union of Newfoundland and Canada, no answers to the questions are being forwarded at this time. However, should the National Convention feel that answers are essential and request that answers be prepared, every possible step will be taken to obtain the desired information.
Question: Table a certified copy of the act covering the operations of the Bank of Canada as amended to date.
Answer: Attached is a copy of the 1938 office consolidation of the Bank of Canada Act.
Question: Table a statement of the affairs of the Bank of Canada as at October 31, 1947, showing the gold reserves, the amount of paper issued against such reserves.
Answer: Attached are copies of the Monthly Statement of Assets and Liabilities of the Bank of Canada, as at October 31, 1947, showing the value of notes in circulation.
On April 30, 1940, an Order-in-Council (the Exchange Fund Order) was enacted, providing for the sale of the Bank's gold holdings to the Foreign Exchange Control Board and for temporary suspension of the Bank's minimum gold reserve requirement, as referred to in section 26 of the Bank of Canada Act. Since that time the Foreign Exchange Control Board has been the repository for the gold reserves formerly held by the Bank. Under the Foreign Exchange Control Act of 1946 this provision was extended until 60 days after the commencement of the first session of Parliament commencing in the year 1949. Copies of the 1946 annual report of the Foreign Exchange Control Board are attached. On pp. 24 and 25 of that report is set out a statement of the assets and liabilities of the Board including stocks of gold and foreign exchange. In the statement to the House of Commons on December 16, 1947 (see answer to question on the amount due by Canada to the USA as balance of trade as at October 31, 1947), the Minister of Finance stated that the Canadian holdings of gold and US dollars at that time amounted to approximately $500,000,000.[1]
Question: Table a statement showing the amount due by Canada to the USA as balance of trade as at October 31, 1947.
Answer: Copies of the Monthly Summary of Foreign Trade of Canada, November 1947, are attached. This summary contains statements of the Canadian balance of trade with all countries, with the United Kingdom and with the United States. Exports of foreign goods are covered in the statements but movements of gold are not.
Copies of the official report of the House of Commons Debates of Tuesday, December 16, 1947 are also attached. On that date the Minister of Finance made a statement in the House of Commons (pp.323-340) concerning the Canadian balance of payments with the United States. This statement may be of assistance to the National Convention. Question: The total amount of loans raised each year from the year 1931-32 to the year 1946-47 both years inclusive, showing where such loans were raised and what interest is being paid.
Answer: Since the composition of the Canadian public debt is constantly changing — some loans being paid off, some refunded, and the ownership of some being changed — only the last statement of the composition of the debt should be used. The preceding answer contains this statement.
Questions: (a) Effect of Canadian austerity programme on Newfoundland.
(b) Newfoundland - United States trade.
(c) Sales of newsprint.
(d) Transactions in US dollars.
(6) Canadian bank notes in Newfoundland.
Answer: (a) The provision of US currency for travel purposes is being more closely controlled.
(b) The latest figures available for imports and exports are those for the year ended 31 March, 1947:
Imports from the USA $25,800,800
Exports to the USA 24,611,500
Excess of imports 1,189,300
(c) Payment for Newfoundland newsprint is required in US dollars in the case of exports to non—sterling areas (except Canada).
(d) (i) Total sales and purchases of US dollars by authorised dealers in New January 1948 NATIONAL CONVENTION 1039 foundland are notified periodically to the Department of Finance.
(ii) The government is not involved in such transactions and receives no remuneration in respect thereof.
(e) Under the Currency Act (no.ll of 1939) notes of the Bank of Canada issued and valid under the laws of Canada pass current and are legal tender to any amount in Newfoundland and its dependencies. The volume of such notes in circulation in Newfoundland is not known.
Mr. Smallwood I must rise to a point of order. Are we now going to debate these replies in formal sessions, or are we merely to give the replies without comment? I avoided very scrupulously one word of comment on these replies, because I did not think it was proper.
Mr. Chairman Any personal comment on the replies at this time is entirely improper.
Mr. Cashin Mr. Chairman, as the one who asked these questions I have the right to draw the attention of the members to the answer given me when that answer is evasive and not correct.
Mr. Chairman But not at this stage, Major Cashin.
Mr. Cashin Will I have to write the comment on these questions which are not properly answered?
Mr. Chairman I am ruling now that you have no right to comment on the question, and please don't do so any further.
Mr. Cashin Well then, Mr. Chairman, I am not going to read any further questions. I feel that under the circumstances I have a perfect right, and I want to point out that the answers are not correct, and furthermore I want to point out that there are some answers not given at all.
Mr. Chairman You have no right to comment on the questions at this time.
Mr. Cashin But I have the right at question time to draw your attention to the fact that on a certain date I asked specific questions and they have not been answered.
Mr. Chairman Not when it is provoking debate.
Mr. Cashin But I have the right...
Mr. Chairman Not at this stage. You have the right to deal with any questions you have received at the proper time.
Mr. Cashin I know that when a question is not answered, or answered improperly, that I have the right at this stage to question it, and to point out to you that question is not properly answered.
Mr. Chairman No, I say that at this time you have the right to deal with the answers, and to comment upon them if and when we go into committee of the whole
[Mr. Cashin alleged that a number of his questions had been improperly answered]
Mr. Chairman I want to make it clear, Major Cashin, that you will be given any opportunity you like to discuss these matters fully and at length, and in ruling that it is improper now, I hope you will not feel that I am trying to abridge your rights in any way now. You will be given the fullest scope to express yourself on these matters when the proper time arrives, I can assure you of that.
[Mr. Cashin went on to make further observations on the answers]

Report of the Ottawa Delegation Proposed Arrangements for the Entry of Newfoundland into Confederation Committee of the Whole

Mr. Smallwood Mr. Chairman, as I was saying last year when I was so rudely interrupted, on the question of taxation of property raised by Mr. Hollett, I was saying this: that if we become a province of Canada there would be people in Newfoundland who then would have three different governments over them. The people of St. John's, for example, would then have three governments. They would have the government of St. John's, known as the city council, they would have the Government of Newfoundland, known as the provincial government, and they would have the Government of Canada, known as the federal government. In Windsor, Wesleyville, Port-aux-Basques, in Grand Bank, Fortune, Harbour Grace and certain other places the people under confederation would also have three governments over them.... In other parts of Newfoundland, where they have no town council, those people would have only two governments — the government of the province, and the Government of Canada.
Now, as to taxing their property — and by a tax on their property I mean a direct tax on their 1040 NATIONAL CONVENTION January 1948 houses, or their land that their homes stand on, or their outhouses and barns and buildings, their fish stores, flakes, and fish stages, their schooners and boats and fishing gear - that is what I mean by property. As to a tax on that property, if we become a province it must be made very, very clear, in the first place, that the federal government does not collect any taxes whatsoever on property. The Government of Canada has no property tax. It never did, not for the last 81 years since the Government of Canada began in 1867. The Government of Canada has never collected a dollar, or a cent in property taxes from anyone in any of the nine provinces of Canada, and if Newfoundland becomes a province then the Government of Canada will not collect any property tax from anybody in Newfoundland. Now that I hope I have made very, very clear...
Now as to the provincial government, that is the next government you come to, the government of the province. Will they collect any property tax in Newfoundland? I, of course, not being in that government of the future, none of us being in it, that government of the future still not being in existence, I cannot and you cannot, and no man can answer finally for what they will do and what they will not do, but this we can answer, that the government of the Province of Newfoundland is not obliged to collect any property tax, is not compelled to collect any property tax, is not forced to collect any property tax. If they do so it will be of their own free will. If the government of the Province of Newfoundland decides to collect a tax on one's homes or gardens or animals or boats or fishing gear or schooners, if they decide to collect such taxes it will be they who will decide it, and who will they be? They will be the elected members of the House of Assembly, elected by the people of Newfoundland. There is not a man sitting in this chamber today who, if he were a member of the future House of Assembly of this island would even dream of agreeing to putting any property tax on the people of Newfoundland. No one would dream of it.... Now remember they have not got to put them on. There is no law which says they must put on property taxes. The Government of Canada does not say, and cannot say, "You, the provincial government of Newfoundland, must put on property taxes." They have no law that gives them the right to say it. The Parliament of Canada cannot say it. If our future government does it, it is because they decided to do it of their own free will, and that they are not likely to do. Someone may say to me, "But what about the other provinces that are in the union now, there are nine of them. And these nine provinces collect a tax on the property of the people of their provinces." Some do, some do not. I wrote a letter to the Premier of the Province of Nova Scotia on 28 October last, and I asked the Premier to tell me what taxes the government of the Province of Nova Scotia collects on property, and here is the reply:
Halifax, November 12, 1947.
Dear Sir:
The Honourable the Premier has asked me to reply to your letter to him of October 28 with reference to the revenue derived by the provincial government from taxation on land or from real estate.
In this province, real and personal taxation is the principal source of revenue of the municipal governments, but the provincial government as such does not impose any direct taxation on land or on real estate with the exception of a tax imposed by the province on wild lands and a further tax for a forest fire protection fund.
The land tax, so called, amounts to one per cent of the appraised value of the land and is imposed in respect of all holdings in excess of 1,000 acres... This tax produces about $70,000 a year.
With respect to fire tax, so called, the tax is three-quarters of a cent per acre on all holdings of 200 acres or more. This tax produces about $25,000 per year.
The total provincial tax on real and personal property is less than $100,000 a year and the total provincial revenue for the year ended November 30, 1946, the last complete year of the province, was $22,500,000, so that the total direct taxation on land or from real estate is less than one per cent of the provincial revenue.
Yours very truly, C. L. Beazley Legislative Counsel.
Now that's that tax on wild lands that the Government of Nova Scotia collects... Now another one:
Premier's Office Prince Edward Island
November 13, 1947.
Mr. J. R. Smallwood National Convention Colonial Building St. John's, Newfoundland.
Dear Mr. Smallwood,
The following information is forwarded
as requested in your inquiry of October 27: (a) Provincial revenue from taxation on land and other real estate April 1, 1946—March 31, 1947 . . . . $86,495.27 April 1, 1945 — March 31, 1946 . . . . 91,034.46 (b) Rate of such taxation: 40¢ per $100 valuation. (c) Proportion "property" taxation bears to the whole provincial revenue April 1, 1946 — March 31, 1947 . . . . 2.1% April 1, 1945 —— March 31, 1946. . . . 3%
Any further information that you require with reference to this province will be promptly forwarded upon request.
Very truly yours, J. Walter Jones, Premier.
PS After current fiscal year, land and road taxes will be removed if government reelected.
And since that his government has been reelected, and the last little bit of land taxation in Prince Edward Island will be gone for the next two or three years.
I also wrote the Premier of New Brunswick, and he said he was having the information prepared for me, but so far it has not been sent. Now let's look at Nova Scotia, with a population of 620,000, just about double the population of Newfoundland, and what do they collect? The Government of Nova Scotia collects less than $100,000 out of a total of $22,500,000, less than half a cent out of every dollar of taxes they collect in Nova Scotia. So if we become a province, and we have our provincial government, number one, no property tax from the Government of Canada. Number two, no property tax from the Government of Newfoundland, unless the Government of Newfoundland itself on its own free will should want to put on a property tax, and if they should decide to do it, which is very unlikely, as I can't imagine any government getting elected in Newfoundland if they put on a property tax, unless it would be one on the absentee landlords. If I had to do it, it would go right on top of that land that's owned by absentee landlords who live in England, or the States, or Canada. I certainly would put a tax on that, but except for that I can't imagine a Newfoundland government for one moment even considering putting a tax on property in this island, but if they did, and if they followed the example of Nova Scotia, what would they collect? $50,000 a year, if they followed Nova Scotia. We, with half the population of Nova Scotia, would collect $50,000 a year. That is the great argument that the anti-confederates have up their sleeve to bamboozle the people of this country.
Mr. Bailey I rise to a point of order, Mr. Chairman. While Mr. Smallwood is on this tax question will he please tell us how the people of Nova Scotia pay $9 million in taxes on this?
Mr. Chairman That is not a point of order. Mr. Fudge I rise to a point of order. Why is it that he himself, who is the recognised Chairman, has given the ruling?
Mr. Smallwood Not always recognised.
Mr. Chairman My position in the matter is that Mr. Bailey had a question for Mr. Smallwood. I had no means of compelling Mr. Smallwood to answer the question, but I do feel that if he is piloting this measure that he should bend over backwards in his efforts to answer all questions addressed to him, which after all is the responsibility he assumed when he undertook to pilot this bill through the House.
Mr. Smallwood Yes. Well sir, at the moment I am addressing the House on an important matter, and one of very deep and very intense interest to the people of Newfoundland, as I know from a recent visit across the island. I am addressing myself to a point about which there has been a considerable amount of misunderstanding, and even to this moment there is a considerable amount of misunderstanding, and this is the point: if we go into confederation and become a province, and have our own House of Assembly, will that provincial government he forced to put a property tax on the Newfoundland people? And the answer is, "No, it will not", and furthermore, if anyone asks is it likely that they will do it even if they are not forced to do it, the answer is, "No, it is not likely. Not any legislature elected by the 1042 NATIONAL CONVENTION January 1948 people of Newfoundland. Highly unlikely." No people in Newfoundland would elect members who would turn around and put a tax on their property....
As a matter of fact Newfoundlanders already pay a property tax. Who pays it? The people of St. John's pay it. They pay it now. They have been paying it since the 1880s — for 60 years the people of St. John's have been paying a tax on their property, on their homes and buildings and land, on their shops, on their stock of trade in the shops, the people of St. John's have been paying that property tax for 60 years. Sometimes it has happened that the man could not pay that tax. That has happened in St. John's, and it has happened that the city council has taken his house from him and sold it to pay his taxes.... Mr. Hollett, in the speech to which I am replying, read out an act of the legislature of Nova Scotia, an act which authorises city councils, or town councils in Nova Scotia to collect certain taxes. He did not read out the act of the legislature of Newfoundland, which authorises the city council in Newfoundland to collect property taxes. He did not read that out. He had a right not to read it out, a perfect right, but I have a right to point out that there is such an act in Newfoundland, passed in this very chamber, authorising — you will have lots of occasion to applaud before I am through, and Mr. Fudge, who I believe is supporting confederation, will have lots of time to applaud before I am through.
Mr. Fudge Whatever I am or am not is none of your business. I am as good a man as you are.
Mr. Smallwood Well, prove it. Come on, we will go outside.
Mr. Fudge Do you think you can frighten me?
Mr. Chairman Take your seat please, Mr. Fudge. Order, please. Order. You have absolutely no right Mr. Smallwood to refer to Mr. Fudge in the way that you did, and he is not put in the position of proving his honesty.
Mr. Smallwood Well, why did he do what he did?
Mr. Chairman Before you go any further I must ask you to withdraw that statement.
Mr. Smallwood What statement?
Mr. Chairman The statement you just made to Mr. Fudge.
Mr. Smallwood I would ask you to ask him to withdraw his handclap.
Mr. Higgins I move a recess, Mr. Chairman.
Mr. Chairman We will take a recess for 15 minutes. Will the members of the Steering Committee and Information Committee meet me please?
[Short recess]
Mr. Smallwood Mr. Chairman, when we rose for the recess I was addressing myself to the question of property taxes — who taxes what, and I had got as far as pointing out that if Newfoundland becomes a province, the Government of Canada will not collect any property taxes on the people of Newfoundland.... And I had got as far also as pointing out that the provincial government is not likely to impose a property tax. What we have left therefore are the town councils and the city councils. We have only one city council, that is St. John's, but we have at the present time 20 town councils, and we have ten others that are in the process of being formed. That would give us 30, and I dare say, in the course of time, we will have other town councils, because it is the policy of the government, and has been now for several years, to encourage the people of the larger towns and settlements in Newfoundland to form up their own town councils, and these councils are doing such good work that we hope to have more of them in the near future. My friend Mr. Vincent there is a great enthusiast on this matter, and my friend behind me, Mr. Miller, is the chairman of the town council in the Placentia area, and many people are growing very enthusiastic about these town councils, because a town council is formed in a community to do things for that community which no one else will do. The Government of Newfoundland can hardly be expected to collect the garbage from the homes of the people in St. John's. The people of St. John's would scarcely expect the Government of Newfoundland to do that, to use money that the government collects from all Newfoundland to collect the garbage from their doors. The people of St. John's could not expect the Government of Newfoundland to give them concrete sidewalks and drains and curbs and light their streets for them, and to provide parks and other conveniences and comforts of modem civilisation. The people of St. John's could not expect the government to do that, and they don't expect them to do it, and the government don't do it, these things are done by the city council; and in January 1948 NATIONAL CONVENTION 1043 the places outside St. John's if the people want these conveniences they will have to pay for them too. I see Mr. Northcott looking over in this direction.
In Lewisporte the people don't expect the Government of Newfoundland to use taxes that they collect from the whole island and Labrador to provide special conveniences or improvements in Lewisporte, so what the people of Lewisporte did was form their own town council, and so have the people of 20 other places. Now where there is a town council, the town council does these things for their people, but where do they get the money? Well, we know that the government of the country, to encourage people to form the town councils, to encourage them, the government has been helping these town councils financially, giving them money and lending them money, but in all these towns where they have town councils they have the property tax.... As you study the financial statements of the various town councils what do you find? You find that already, here in our own little Newfoundland, we have the property tax.... Now these town councils collect that property tax, so much per head and so much per family, for what? To give it to the Newfoundland government? No. To spend it in their own community, and for conveniences and improvements and comforts that they can't very well expect anyone else to give them. Now if we had confederation any community in Newfoundland that wishes to form a town council is permitted to do it. That is the way it is now. We have not got confederation. Today if the people of any community decide to have a town council they go right ahead and have it. Of course in having it they have got to follow the law of the land. You can't form a town council like that! [snapping fingers] Mr. Quinton, who is now the Commissioner for Public Health and Welfare, for three or four years was what they called Local Government Officer, and the government passed a law, and these town councils are formed under that law, and that law tells them what they can do and what they can't do. Any community in Newfoundland can go right ahead and form that town council. That is the way it is now without confederation, and that's how it will be with confederation.... They have the right to form their councils and they have the right not to form the councils. If the people in any community in New foundland today do not want a town council then they don't have a town council.... That is how it would be under responsible government, and that's how it would be under confederation. The people of a community can decide to have a town council if they want it, and if they are willing to follow the law, and they can decide not to have a town council if they don't want it.
Mr. Higgins Mr. Chairman, can we have a little less repetition in this matter?
Mr. Chairman Well, I am afraid, Mr. Higgins, I must hold that the point is well taken. I have to remind you, Mr. Smallwood, that when I gave you the floor I pointed out that while it was true Ihad no right to impose a time limit on a speaker, or any authority to decide the number of times he could speak, I did however point out, and I again reiterate, that in view of the fact that you have addressed yourself on this matter a number of times it is my right to intervene if you indulge in unnecessary or tedious repetition, and I asked that your reply to Mr. Hollett should be as brief as possible, and your remarks should be confined to matters of a novel nature raised by Mr. Hollett, and I will have to ask you to be as brief as possible and not to indulge in anything which may be fairly regarded as tedious repetition, because if my attention is drawn to it I will have to rule you out of order. Therefore in your own interest I will ask you to be as brief as possible, and not be unduly repeating yourself, but to confine yourself as nearly as possible to matters of a novel nature raised by Mr. Hollett.
Mr. Smallwood I have heard your comments, and I will of course, as always, bow to your ruling. It may be that there are some who would not want our people to know these things that I am talking about, and there may in fact, sir, be some who do not want the people to know the complete and simple truth.
Mr. Chairman If you don't mind, Mr. Smallwood, I must ask you to refrain from plumbing the psychological depths of people's minds, and confine your remarks to the matter in hand. You have been indulging in tedious repetition and on that point I will have to hold that you have been out of order. I must therefore ask you not to be repeating the same statement two or three times when I am sure it would be just as effective if it were said only once.
Mr. Smallwood You will either have to destroy 1044 NATIONAL CONVENTION January 1948 me and mould me all over again, or sit me down. My style of speaking is to say a thing once and then repeat in a different way, and then say it a third time in a rather different way again, and I think I have succeeded in making myself understood to the people of Newfoundland, to whom, and not this Convention, I am talking.
Mr. Chairman I beg your pardon Mr. Smallwood, while you are speaking in this House you are addressing the Chair. I am not concerned at all with how people listen to the speeches all over Newfoundland. There has been too much of that altogether. You are talking to the Chair in the first place, and I am not going to be concerned by the probable reaction of the public of Newfoundland to any ruling I may be called upon to make....
In fairness to you, Mr. Smallwood, I want to say this: that if you persist in repeating, then it may very well be that you are running the risk that I will have to hold that you are indulging in tedious repetition and are therefore out of order. As to the alternative of destroying you or any other individual here, I don't think I need make any comment on that. But if you persist as you have been going, I will have to ask you to avoid as nearly as possible, if you will, repeatedly stating the same thing, even though you do say it in a different form.
Mr. Smallwood May I ask, in connection with the words "tedious repetition", does that refer to repeating a certain fact over and over and then making the statement again in different ways? Does it mean repeating the same topic over and over, or does it refer to describing that topic over and over?
Mr. Chairman If the statements made by you are substantially the same, whether the verbiage employed, or phraseology employed may be slightly different in each case or not, if you are repeating yourself to the point where it is becoming tedious to the Chair, then, if any member raises that point of order, I will have to rule that this tedious repetition is out of order.
Mr. Smallwood I take it that I will have the same right to speak on any matter as any other member of the House?
Mr. Chairman I don't know if you realise the implications contained in your remark. I am not making one rule for you and another rule for other members. I am endeavouring to be perfectly fair with everyone alike, however far short I may fall of my objective. As far as I am concerned, Mr. Smallwood, you need not single yourself out at all. To the best of my ability I intend to be absolutely impartial and fair to everyone.
Mr. Smallwood I was not imputing, what I was inquiring was this: who decides whether a debate has become tedious, is it the Chairman, or any member who wishes to object?
Mr. Chairman In the final analysis I have to decide whether it is tedious repetition or not. Mr. Higgins has taken the objection, and I think the objection is well taken.
Mr. Smallwood In my first reply to Mr. Hollett I was prevented from continuing because at that time we lacked a quorum.
Mr. Chairman It is not necessary to bring that up again, Mr. Smallwood.
Mr. Smallwood On the last day we met Mr. Hollett read out certain items. Is there anything improper in that, sir?
Mr. Chairman There is no good to be served.
Mr. Smallwood The question is not as to what good is to be derived or not.
Mr. Chairman Let us get down to the case and forget what has happened previously. What went on in 1947 is water under the dam. It is over and done with, and let us not refer to it again. A remark of that kind is only calculated to reflect on everybody in this chamber and the Chair included. Therefore I must ask you now, please, and this is the second time you have done it, don't refer again to what happened here on the 12th day of December.
Mr. Smallwood Is that an order, sir? Is that a ruling? Can't I mention that?
Mr. Chairman I am ruling that the events, and I do rule here now, that the events which transpired on Friday, December 12th last have absolutely no relevancy to this debate and are not to be mentioned again.
Mr. Higgins We are trying to keep a quorum here now, sir. That is why I intervened, and that is the only reason you had no quorum on the 12th.
Mr. Smallwood May I object to that? I had been speaking ten or 12 minutes on the 12th when I had to stop because there was no quorum.
Mr. Chairman Let us please not concern ourselves in retrospect with these matters. Let us kindly get on, in the name of honesty and decency, with the job we are doing. Let us forget what January 1948 NATIONAL CONVENTION 1045 is gone and get on with the business before the Chair.
Mr. Smallwood I hope we will all observe that. Personally I would have been through by now if Mr. Higgins had not interrupted. Mr. Hollett, on Friday the 12 of December, quoted to the House an act of the Province of Nova Scotia authorising town councils and other such municipal bodies to collect taxes in their respective areas, and also setting forth the penalties which could be imposed by those town councils upon the residents in their areas if they refused or failed to pay their taxes. First let me ask you: this is a copy of the Newfoundland Gazette, and in it they have published the Town of Curling Act. Am I proper in quoting from it?
Mr. Chairman Oh yes, we must take notice of law.
Mr. Smallwood This refers to the town council of Curling. I assume it is similar to the other acts that apply to all town councils.
[Mr. Smallwood read the act]
Mr. Smallwood So there is nothing extraordinary, there is nothing unusual, when one of the provinces of Canada passes a law giving authority to the town councils in that province to collect certain taxes. In doing that, if they set penalties that is quite usual, and that is exactly what has been done in respect of town councils and city councils here in Newfoundland. There is nothing unusual about it. If you are going to give the town council the authority to collect certain taxes, you must also set up the right to punish the man who refuses to carry out the law and pay his just taxes. Now, what does it amount to? If Newfoundland becomes a province would the people have to pay taxes on their homes and boats and fishing gear, on their livestock and land, gardens and farms, generally on their property? Will they have to pay those taxes? And the answer is, "No, they will not have to pay those taxes".... They will not pay any taxes on property to the government of the province, and they will not pay any to the federal government of Canada. They will pay property taxes only if they have a town council, and as to whether they will have a town council or not is their own business. They decide that for themselves without any coercion from anyone else, whether it be the Government of Newfoundland or the Government of Canada, should we become a province.
That is all I want to say at this time about property taxes. I hope the other members will debate the matter. I would not like to see the matter hidden under a bushel. I would like to see it thrashed out. I would like the people of Newfoundland to know what the facts are — the truth, the whole truth, and nothing but the truth....
Now sir, I turn to another aspect of the speech of Mr. Hollett on Friday the 12th of December.... Mr. Hollett examined the estimates, or guesses if you like, that I brought in as to what revenue or expenditure the provincial government of Newfoundland will have to make, and what revenue it will have to get to balance its books — a series of figures designed to show whether or not the provincial government of Newfoundland could pay its way — whether Newfoundland, as a province, could pay its way officially. Mr. Hollett thought that we would need $15,138,000 a year for the first four years, and $15,638,000 a year for the next four years, and that on to that I should add something or other, I think it was $4 million, to bring the total up to around $19 million. It was Mr. Hollett's contention that the provincial government of Newfoundland would need $19 million more or less to pay its way, and as I had shown a revenue to go against the expenditure from all sources of only $14 million that therefore we would be about $6-7 million short.
Mr. Hollett $5 million.
Mr. Smallwood Yes, $5 million short to balance our budget. We would fail by $5 million. Mr. Hickman put the figure I believe at $17 million, but Mr. Hollett upped it a bit and broughtit to $19 million. I want to examine it, because that is a matter of prime importance. I said when I introduced the provincial budget so-called, that if the provincial government of Newfoundland could not pay its way and balance its budget without cutting down on the public services, and without driving up taxation, then that alone was enough to condemn confederation. I said that at the outset, and I repeat it now. Now we have a yardstick to go by, and that is the Economic Report. The Economic Report gave us an estimate of $30 million revenue per year, and an expenditure of $25 million per year. The $25 million was to cover all ordinary expenditures of the Government of Newfoundland — all ordinary expenditures. It did not include capital, or reconstruction, or special, just ordinary expenditure, and that 1046 NATIONAL CONVENTION January 1948 would cover it all. That is if we were not in confederation, if the Newfoundland government had to provide all the ordinary services that Newfoundland needed. That figure is a bit more than Mr. Wild, the Commissioner for Finance, estimated when he appeared before us in a private session. I think he estimated something like $23 million, but it is a bit less than the figure estimated by Mr. James, the present Commissioner. I think Mr. James has it around $26 million, but what the Economic Report has done is to take the $23 million estimated by Mr. Wild and add a couple of million to it.
I am going to accept that $25 million, at least for the purpose of argument. If we can accept that as the amount required under Commission of Government or responsible government to carry on this country, to cover all ordinary expenditures and you want to get an idea of what it is going to cost the government of the Province of Newfoundland, if we went into confederation, the thing to do is this: take that $25 million, and take off from it those items of expense which, if we became a province, the provincial government would not have to pay. That is reasonable.... Under confederation the provincial government has far fewer things to do.
The provincial government would not have a railway to pay any losses on. The provincial government would not have any lighthouses, or public wharves, or breakwaters or dredging, or what we call marine works.... The provincial government of Newfoundland would not have to pay any pensions to ex-servicemen of any war.... The provincial government would not have to pay any deficit on the Postal Telegraph Department, and I remind you that between 1920 and 1940, that department of ours dropped on an average of half a million dollars a year loss. The provincial government of Newfoundland would not have to pay the expenses of the Fishery Department — fishery inspectors, bait depots, and collection and distribution of bait, and generally what we call fishery matters, because these would be done by the federal government, and also the provincial government would not have to pay any interest on that part of our public debt which is known as the 3% guaranteed stock — $60 million odd — because the Government of Canada would take over that public debt, and therefore the provincial government would not have to pay the interest and sinking fund, if there was any sinking fund on it. Now all these things, and a number of other things — I won't delay the house to describe them all, or even to name them all, because I am trying to save time. I want to be out of this by the end of January, right out of it altogether, so I won't take the time to list over these item by item.
Mr. Chairman If you don't mind Mr. Smallwood, could I take that as an undertaking?
Mr. Smallwood Of what, sir?
Mr. Chairman That it will be closed by the end of January?
Mr. Smallwood I am not a member of any party or organisation which would have power to guarantee any such thing, but I am most eager, having just come back from a trip to many thousands of people in the last two weeks, to get this Convention closed up by the end of January, but I can't guarantee that. I have been here for two years almost, and I would not guarantee anything.
Mr. Hollett May I rise to a point of order? Can't we get on with that business?
Mr. Chairman Mr. Smallwood, I think you had better confine yourself to the matter in hand.
Mr. Smallwood I was going straight on and was interrupted, or I interrupted myself.
Mr. Chairman Well, you are meandering all over the place. Never mind anything beyond the point in hand. Let us get down to brass tacks.
Mr. Smallwood I was doing that when I was interrupted.
Mr. Chairman You are interrupted because you don't get down to the root of the matter.
Mr. Higgins Go back to the brass tacks!
Mr. Smallwood I want the people to know me truth, so that they can decide...
Mr. Chairman I want to make clear again the fact that the people are going to decide nothing. The people will decide next spring what is going to be done, but if you don't mind while I am in the Chair all members will be subject to the rules governing debate.
Mr. Smallwood I for one never forget it,
Mr. Chairman And any ruling I make will not be calculated to placate the public or any section of the public.
Mr. Smallwood To get back to this estimate of ordinary expenditure brought in by the Economic Committee. I could take off from that item by January 1948 NATIONAL CONVENTION 1047 item what would not be in it if we become a province, and the total is $11 million. Now that $11 million off $25 million, and what is left? What is left is what the provincial government would have to find and the amount, if my arithmetic is right, is $14 million. On the basis of the estimate of the Economic Committee, which I did not make and which is not my estimate, if we take off from that those expenditures and expenses which the Government of Newfoundland would not have to pay if we became a province, what would be left for the provincial government to find would be $14 million, not $17 million as Mr. Hickman suggested, not $19 million as Mr. Hollett suggested, not even the $15 million that I brought in myself.
Mr. Higgins It is still repetitious. Can't we go on?
Mr. Smallwood I will walk out. I will resign myself. I will hold myself in sir, but...
Mr. Chairman Now, Mr. Smallwood...
Mr. Smallwood I don't want to turn on Mr. Higgins, but ifI do someone will be hurt, and I won't be the one that will be hurt.
Mr. Higgins So what, Mr. Smallwood?
Mr. Smallwood You will find out if I tum on you.
Mr. Chairman Mr. Smallwood, you are not going to turn on any other member, nor is any other member going to turn because he wants to. I quite agree that if the figure is $14 million there is no occasion for you to go on and say $19 million and $17 million and $15 million...
Mr. Smallwood I said, sir, that it is $14 million.
Mr. Chairman Please don't repeat it again.
Mr. Smallwood Sir, I am most eager to cooperate with you. I am equally eager to stand on my rights in this Convention, and I do represent a section of this country, but I bow to you as I have always done.
Mr. Chairman I quite agree, but I still say that if you are going to avoid the charge of tedious repetition, in quoting a certain figure it is not four or five or ten other figures. If it is something come right out positively and say what it is.
Mr. Smallwood But as I was replying to a speech made by Mr. Hollett, and as Mr. Hollett in that speech put it at $19 million, am I not entitled to point out that it is $14 million and not the $19 million that Mr. Hollett said — that and nothing else? That is exactly what I was doing.
I am glad now, sir. $14 million is what would take for the provincial government of Newfoundland to carry on. Not the $15 million that I formerly estimated, not the $17 million that Mr. Hickman estimated, and not the $19 million that Mr. Hollett estimated, but $14 million.
Mr. Chairman That is not what you said before.
Mr. Smallwood Well, sir, I was under the impression that I had. Possibly my memory on that is defective. We have to find it in one way and another, some from the people of Newfoundland in taxation, some as I have shown in other ways from other sources. Incidentally, it has been pointed out to me by Mr. Hollett that I have taken the $28 million cash surplus that we have and put it on deposit with the Government of Canada at 2.63% interest, and I have taken the interest for the first four years as $600,000 a year, and then for the second four years I have averaged it as $299,000, roughly $300,000 a year. I admit on the objection from Mr. Hollett that I won't have $28 million to put on deposit with the Government of Canada. I will go a little further, and say that I will have $38 million, which Major Cashin has told us is the surplus in this country. I will now take the 2.63% interest on that.
Now sir, it is 5.45 pm, and you have asked me kindly to rise the House at this time. If we are meeting tonight...
Mr. Chairman I don't think it is possible to continue the debate tonight, and perhaps not for the rest of the week, and I don't think we will be able to come this evening.
Mr. Smallwood You mean that we can't meet for the rest of the week in the night, but we can in the day?
Mr. Chairman Oh yes, definitely.
Mr. Smallwood In that case I move that the committee rise and report progress and ask leave to sit again tomorrow.
[The committee rose and reported progress. The remaining orders of the day were deferred, and the Convention adjourned]


Newfoundland. The Newfoundland National Convention, 1946-1948 Vol 1: Debates. Edited by J.K. Hiller and M.F. Harrington Montreal: Memorial University of Newfoundland by McGill-Queen's University Press, 1995).



Selection of input documents and completion of metadata: Gordon Lyall.

Notes de bas de page:

  • [1] Volume 11:520. [Volume II is not in The Confederation Debates Collection]
  • *
    Department Additions to "Ordinary" Expenditures as a result of union with Newfoundland in a typical year ($000)
    Agriculture 200
    Auditor General 5
    Civil Service Commission 10
    Finance 225
    Fisheries 600
    Lieutenant Governor 9
    Insurance 5
    Justice 150
    Labour 657
    Legislation 83
    Mines and Resources 624[1]
    National Defence 235
    National Health and Welfare 473
    National Film Board 30
    National Revenue 325
    Post Office 1,164
    Printing and Stationery 5
    Public Works 850
    RCMP 500
    Secretary of State 15
    Trade and Commerce 137
    Transport 1,393
    Veterans' Affairs 1,700
    Total 9,395
  • 1. Since the above estimates were prepared, the estimate for the Department of Mines and Resources has been revised upward to $708,000, making the total estimated additions to "ordinary expenditures" $9,479,000.
  • [1] Tables containing detailed financial information on Canadian National Railways have not been printed here.
  • **
    United Kingdom* as at Mar. 31/46 United States* as at June 30/46 Canada as at Oct. 31/47
    Total gross debt ÂŁ23,773,875,000 $269,422,099,000 $17,223,229,733
    Estimated net debt ÂŁ23,042,364,000 $254,714,224,000 $12,464,098,157
    Population for the year for which the estimates of public debt are given
    48,175,000 (estimated) 141,229,000 12,582,000
    Net debt per capita ÂŁ 478
    or $1,926 $ 1,804 $ 991
  • * Source: Moody's "Governments and Municipal, America and Foreign, 1947".
  • [1] The tables are omitted.
  • [1] Tables giving information on Bank of Canada affairs are not printed here.

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